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Economy/Resources - 169. page

Xinhua: Central Government Economic Work Conference Held in Beijing

Xinhua reported that China’s Central Government Economic Work Conference was held from December 10 to 13. All members of the Standing Committee of the Communist Party Politburo attended the Conference. President Xi Jinping delivered an important speech summarizing the economic work done in 2013. He explained his overall requirements and goals for 2014. Premier Li Keqiang laid out his macroeconomic policies as well as detailed arrangements of the path to the deliverables. The Conference pointed out six focal tasks for the coming year: (1) Firmly ensuring national food security; (2) Vigorously adjusting industrial structures; (3) Pressing hard on debt risk prevention and control; (4) Actively promoting coordinated development among regions; (5) Protecting and improving the livelihood of the people; and (6) Continuously raising the level in implementing the nation’s “Opening-Up” policy. The Conference called for sustaining “steady growth” while implementing adjustments and reforms. The officials in top leadership from all provinces, key cities, central government ministries, primary state-owned companies, and banks, as well as the military attended the Conference. 
Source: Xinhua, December 13, 2013
http://news.xinhuanet.com/politics/2013-12/13/c_118553239.htm
Briefings | | |   Economy/Resources

People’s Daily: 100 Million Chinese Tourists Expected to Travel Overseas in 2014

The China Consumers Association recently published the 2013 Travel and Meal Investigation Report. According to the report, currently, the number of countries and regions that Chinese citizens have selected for traveling overseas has reached 150. In 2012, Chinese tourists spent US$102.1 billion when they travelled overseas. It is expected that the tourist population will exceed 90 million in 2013 and break the 100 million mark in 2014. The report indicated that, when traveling, more and more people favor the self-guided tour.

Source: People’s Daily, December 6, 2013
http://travel.people.com.cn/n/2013/1206/c41570-23763050.html

Briefings | | |   Economy/Resources

Trading of Chinese Renminbi Is Increasing Rapidly in Russia

Russian Finam recently released data indicating that, as of November, the trading volume of the RMB at the Moscow Interbank Currency Exchange (MICEX) had increased 19 times since April. At the same time, statistics from many Russian banks with RMB-related businesses showed that the Russian public’s recognition and acceptance of the RMB has also risen. Analysts believe that the weakening of the euro and the dollar, the steady growth of Sino-Russian trade, and other factors have been accelerating the process of the internationalization of the RMB. 

Back in December 2010, MICEX started direct trading of the RMB against the ruble and became the first overseas brokerage offering an RMB exchange. In April of this year, the brokerage increased the trading options of the RMB against the ruble, extended trading hours, and added more delivery methods. Trenin, director of the Moscow Carnegie Center, told reporters that, by adjusting the trading rules, the RMB obtained the same trading conditions as the dollar and the euro. Trenin affirmed that, as the liquidity of the dollar and euro is tightening, the average daily trading volume of the RMB has been increasing significantly. Since May of this year, the average daily trading volume of RMB has exceeded 22 million yuan. 

People’s Daily, December 3, 2013 
http://world.people.com.cn/n/2013/1203/c1002-23721945.html

Briefings | | |   Economy/Resources

Non-Performing Loans Continue to Grow

According to the China Banking Regulatory Commission, the total value of non-performing loans has increased for seven consecutive quarters. 

As of the end of the third quarter of this year, commercial banks saw their non-performing loans reach 565.6 billion yuan (US$92.85 billion), an increase of 70.7 billion yuan (US$11.61 billion) since the beginning of the year. This accounts for 0.97 percent of total loans, an increase of 0.01 percentage point compared to the end of the second quarter; the figures show that there has been an upward trend for seven consecutive quarters. 
The total of non-performing loans for 16 banks that are listed on stock exchanges amounted to 460 billion yuan (US$75.52 billion) in the third quarter, an increase of 18 billion (US$2.96 billion) from the second quarter. Of these 16 banks, 14 have seen both their non-performing loan ratio and the value of the loans increase. Meanwhile, the profit growth of the 16 banks has dropped from 17 percent for the same period last year to 13 percent. 
Source: Huanqiu, December 3, 2013 
http://finance.huanqiu.com/data/2013-12/4623461.html
Briefings | | |   Economy/Resources

Xia Bin: Urbanization Depends on Further Reforms

Xia Bin, Director-General, Financial Research Institute, Development Research Center of the State Council (DRC), People’s Republic of China, wrote that the two key issues affecting urbanization in China are welfare benefits to farmers and urban planning. 

 Xia stated that the Chinese leadership has adopted the strategy that China must accelerate urbanization in order to stabilize the economy. At the minimum, according to Xia, China must carry out reform in these areas: 
1. To accomplish the objective of increasing the welfare benefits to farmers, reform is needed in the household registration system, housing, the medical system, retirement, education, the financial system, and land use; 
2. To accomplish the objective of ensuring the source and efficacy of the funds for urban infrastructure construction, reform is needed in the financial system, land administration, the allocation of resources, the division of power between the central government and local governments, the price mechanism involved in the factors of production, and the overall government administrative system;
  
3. In order to optimize urban planning, including the creation of new municipalities, a series of policies must be revised.
“In short, we can say China has almost no existing system and policy it can follow without addressing the need for improvement in the areas of reform that must be carried out in order to achieve its urbanization strategy. Therefore, the current strategy to promote urbanization is to promote further reforms. The essence of the urbanization strategy is to accelerate China’s reforms.” 
Source: China Economic Times, December 2, 2013
 http://www.cet.com.cn/ycpd/sdyd/1045775.shtml
Briefings | | |   Economy/Resources

Due to Local Debts, Shadow Banking, and Property Bubbles, China’s Economy May Crash at Any Time

On December 3, 2013, the Hexun website, a leading financial and securities information website in China, published an article on three major financial risks that China faces. The three major financial risks in China are local government’s debts, shadow banking, and property bubbles. Once one of these 3 financial risks gets out of control, China’s economy may crash at any time.

China’s local government’s debts have been growing continuously in recent years. Currently, local debts have reached around 20 trillion Chinese yuan, which is 40 percent of its total GDP for 2012. Shadow banking in China poses the 2nd biggest risk for its financial system. As China has never publicized any real estate statistical data, there has been a debate as to whether China has a property bubble. However, according to scholars’ research there are 68 million vacant housing units in China. If that is true, then China’s property bubble is very large. Once the bubble breaks, a destructive domino chain reaction may not only crash China’s economy but also lead to wide scale social unrest in China.

Source: Hexun, December 3, 2013
http://opinion.hexun.com/2013-12-03/160234304.html

Briefings | | |   Economy/Resources

CRN: The Emerging Countries Are Good Consumers for China’s Excess Capacity

China Review News (CRN) recently published an article discussing China’s manufacturing overcapacity issue. China’s market demand apparently does not match the volume of current production. China is facing a major problem of excess manufacturing capacity. It is not easy to resolve it without massively increasing the unemployment rate. The author expressed the belief that the Chinese manufacturing structure was not designed for domestic consumption to begin with. Therefore, it is highly possible that emerging economies, whose share of the global market has grown to 29.7 percent (from 15.4 percent), may be a good target market. The article suggested that the Chinese companies take the opportunity of an appreciated Chinese currency and invest in the new markets so that a large percentage of China’s manufacturing capacity can be consumed.

Source: China Review News, November 28, 2013
http://hk.crntt.com/doc/1028/9/1/2/102891236.html?coluid=53&kindid=0&docid=102891236&mdate=1128074739

Briefings | | |   Economy/Resources

Sum of 31 Provincial GDP Stats Was 5.3 Trillion More Than National Stats

Recently, the National Bureau of Statistics announced the country’s 31 provincial GDP data for the first three quarters of this year. The total of the 31 provincial GDP was 43.95 trillion yuan, which exceeded the national statistics of 38.68 trillion by 5.3 trillion.

In fact, this phenomenon has been going on for years. The media have been reporting that, since 1985, when the central government and provincial and local level governments started to compile GDP data independently, the sum of the provincial GDP data has been higher than the national statistics, and the gap has been increasing. For example, the total of the 2009 provincial GDP was above the national figure by 2.68 trillion yuan; the gap increased to 3 trillion yuan in 2010, 4.6 trillion in 2011 and 5.76 in 2012.

According to Liu Yuanchun, the Vice president of Renmin University of China, the main cause is that local governments engage in data manipulation. In order to accomplish the tasks such as energy conservation and performance goals, including GDP growth, local governments modify the data to make it look better. When the reporter interviewed a county government fiscal chief in a city in West China, the official affirmed that such data fraud is almost a routine.

source: Xinhua, November 27, 2013
http://news.xinhuanet.com/2013-11/27/c_125766611.htm

Briefings | | |   Economy/Resources